Gold, silver, pgms, mining and geopolitical comment and news

The New York gold price closed Thursday at $1,114.50 down from $1.125.80 down $11.30. In Asia on Thursday, it lifted it to $1,115.55 ahead of London’s opening and then the LBMA set it at $1,112.90 down from $1,119.00 with the dollar index up at 99.08 up from 98.85 Thursday. The euro was up at $1.0918 up slightly from $1.0910 against the dollar. The gold price in the euro was set at €1,019.33 down from €1,025.66. Ahead of New York’s opening, the gold price was trading at $1,115.90 and in the euro at €1,022.07.

The silver price in New York closed at $14.24 down 24 cents at Thursday’s close. Ahead of New York’s opening, the silver price stood at $14.25.

Price Drivers

Wednesday saw no purchases or sales to or from the SPDR gold ETF but a purchase of 1.40 tonnes into the Gold Trust. The holdings of the SPDR gold ETF are now at 669.229 tonnes and at 166.45 tonnes in the Gold Trust. We expect the gold price try to climb in consolidation mode, today.

Today sees a slew of data from the U.S. GDP to the E.U. inflation rate. For gold and silver investors the importance of these lies in their impact on the exchange rates of the dollar and the euro. We constantly get bombarded with new statistics trying to give us the impression that all is well in the developed world but certain realities come through.

Today, so far we have seen Japan desperately attempting to engineer inflation to 2% using negative interest rates to do so. We see this type of inflation damaging the credibility of the Yen, already no longer a ‘safe haven’ because of the treatment it has received to date. The euro likewise is under attack with hints at more stimuli on the way.

It seems unfashionable to say this but central banks can only influence monetary policy and not engineer growth. This is the job of government using fiscal resources and structural reform as well as doing what they can to assist the consumer on the ground with improvements to his job security, value of his house and putting some disposable income in his pocket. At the moment it is only Saudi Arabia that is doing that for consumers all over the world.

But with U.S. economic growth declining in 2015 today may see economic growth drop to below 1% from nearly 4% at the start of last year. What happened to the recovery and the efforts to boost it since 2008?

Will lower growth weaken the dollar? With the other globally leading currencies trying their best to fall, against what will the dollar fall? If so, this is gold positive.